With a secured loan, the lender will insist on some sort of security against the money you borrow, often a house or car.
If you default on the payments, the bank or building society can then sell the asset to clear the debt.
If you have run up other debts at high rates of interest, a personal loan can be a good way to manage your borrowings and bring down the cost.
Let’s say you have built up a debt of £3,000 on a store card that charges interest of 29%.
An unsecured loan, often referred to as a personal loan, is not secured against any asset.
Of course, you still have to pay the money back and the lender could pursue you into court if necessary to get its money back.
Doing up or extending your home is a great way to add value to your home – as well as giving you and your family a wonderful place to live.
We can help you find the right home improvement loan for you.
For example, if you are getting married and the wedding is set to cost £7,500, you could take out a loan for £7,500 at 5% over three years.
Your monthly payments would be fixed at £224.41 and you would pay total interest of £578.76 over the 36-month term.
The interest rate is usually fixed and you pay back the debt over a set term, normally one, three or five years.